Copper Fox Metals to acquire from Bell Copper the Van Dyke Copper Deposit and Sombrero Butte Copper Project in Arizona
VANCOUVER, July 9, 2012 /CNW/ - Mr. Elmer Stewart, President and CEO of Copper Fox Metals Inc. ("Copper Fox" or the "Company") (TSX-V: CUU) is pleased to announce that Copper Fox has entered into a binding offer to purchase (the "Offer") with Bell Copper Corporation ("Bell Copper") whereby Copper Fox will acquire 100% of Bell Copper's interests in the Van Dyke copper deposit located in Miami, Arizona and the Sombrero Butte property located in Pinal County, Arizona (together, the "Properties"). Under the terms of the Offer; Copper Fox will acquire 100% of the Properties by paying to Bell Copper CDN$2,000,000 in cash and assuming Bell Copper's continuing obligations in respect of the Properties.
The Offer is subject to Bell Copper completing the acquisition of the Van Dyke property pursuant to the terms of the purchase and sale and royalty agreement between Bell Resources (Nevada) Corporation, a wholly-owned subsidiary of Bell Copper, and Bennu Properties, LLC, Albert W. Fritz Jr. and Edith Spencer Fritz (collectively, the "Vendors"), including payment by Bell Copper of US$500,000 in cash to the Vendors on closing (see the news release issued by Bell Copper on March 12, 2012). Completion of the purchase is subject to approval of Copper Fox's Board of Directors and completion of legal and technical due diligence to the satisfaction of Copper Fox.
|a)||A historical resource* of 112 million tons with an average grade of 0.52% copper (estimated to contain 1.2 billion pounds of copper) prepared by Occidental Minerals Corporation in 1973 is reported for the Van Dyke deposit,|
|b)||Primary sulphide copper mineralization occurs beneath and to the east of the oxide mineralization in the Van Dyke deposit,|
|c)||A satellite porphyry area to the west of the Van Dyke deposit where azurite (copper oxide mineralization) is reported to occur in outcrop over an area measuring 400m X 500 m,|
|d)||The Sombrero Butte property contains several clusters of copper bearing breccia pipes, which elsewhere in the district host economic deposits, and|
|e)||29 of 34 holes drilled to test 8 breccia pipes intersected significant intercepts of copper mineralization over core intervals ranging from 2m to 72m and average copper grades ranging from 0.37% to 5.85%.|
*The historical resource reported for the Van Dyke deposit is historical in nature and cannot be relied upon. Copper Fox wishes to clarify that insufficient work has been completed to verify the reported historical data and that no mineral resource occurs within the Van Dyke property. The reported historical mineralized intersections have not been verified and the historical data has not been adequately reviewed by an independent Qualified Person and cannot and should not be relied upon.
Mr. Stewart, President of Copper Fox stated, "The proposed acquisitions are "strategic" for Copper Fox which if verified expands Copper Fox's resource base separate from the large Schaft Creek copper-gold-molybdenum-silver deposit and provides the Company advanced projects located in the two major copper producing districts in Arizona. The acquisition of these projects provides Copper Fox corporate flexibility as it completes the feasibility study on the Schaft Creek deposit."
Van Dyke Project:
The 1,100 acre Van Dyke project is located in the Globe-Miami Mining district of Arizona at the town of Miami, 90 miles east of Phoenix, Arizona. The Van Dyke property was developed in the early 1900s when a shaft was sunk to a depth of 1,692 feet. The mine is reported to have produced 11.8 million pounds of copper between 1929 and 1945 from copper oxide mineralization with a reported grade of 5.0 % copper. Between 1968 and 1980 Occidental Minerals Corporation ("Occidental") drilled 70 exploration holes (sixty-two of which encountered measureable copper mineralization) on the Van Dyke property of which 46 of these were used to estimate a historical resource of 112,000,000 tons at a grade of 0.52% copper. Occidental uses a polygonal method to complete the historical resource estimate.
Occidental also completed preliminary metallurgical testwork to determine if the copper mineralization in the Van Dyke deposit was amendable to in-situ leaching, with a pilot program of two 1,000 foot deep holes, 75 feet apart. The reports on the in-situ leaching metallurgical testwork indicated copper recoveries up to 80% using hydrofracturing to improve fluid circulation.
Encumbrances to the original vendors of the Van Dyke property consists of total cash payments of $2.5 million (with $0.5 million ((included in the $CDN2,000,000 purchase price)) at closing and the balance allocated equally over the subsequent eight years). The annual payments are prepayments against a 2.5% Net Smelter Return ("NSR") production royalty and will be deducted from the amounts owing under the royalty, upon initiation of production from the Van Dyke property. 2% of the NSR may be purchased for a period of three years by the payment of US$1.5 million for each 1% NSR purchased.
Sombrero Butte Property:
The Sombrero Butte property consists of 2,887 acres located in the Bunker Hill Mining District 44 miles northeast of Tucson, Arizona. The project is located 9 miles east of the San Manuel Mine (14 billion lbs Cu), and 2 miles south of Redhawk Resources' Copper Creek project (1.1 billion lbs Cu), and both Redhawk and Millrock Resources have recently conducted drilling within 1 mile of the northern property boundary.
The Sombrero Butte property contains at least two main clusters of mineralized breccia pipes which elsewhere in the district overlie associated porphyry copper systems. The mineralized breccia pipes are believed to be associated with one or more underlying porphyry copper systems. At least 25 breccia pipes were located in the Sombrero Butte area and between 2006 and 2008; 34 drillholes were completed to test 8 of the mineralized breccia pipes. The mineralization in these breccia pipes remains open at depth.
Some of the mineralized interval from the 34 holes completed are as
|Breccia Pipe||Drill Hole ID||From (m)||To (m)||Interval (m)||Copper (%)|
|The mineralized intervals listed in the above table do not represent true widths.|
Field work has also identified 12 breccia pipes exhibiting dickite in the altered breccia matrix. Dickite is an indicator mineral which forms under acidic and high temperature conditions, and occurs in multiple porphyry copper deposits, including the nearby San Manuel mine.
These additional breccia pipes occur in a separate cluster located three kilometers further south covering an area of 1 kilometer by 1.6 kilometers. These breccias exhibit hydrothermal alteration (dickite) filling open spaces between angular breccia clasts and sheeted tourmaline-quartz veinlets.
The Sombrero Butte property is subject to an option agreement to earn a 100% interest in the property by making cash payments of US$60,000 in January 2013 and US$650,000 in January 2014.
Elmer B. Stewart, MSc. P. Geol., President of Copper Fox, is the Company's nominated Qualified Person pursuant to National Instrument 43-101, Standards for Disclosure for Mineral Projects, has reviewed the technical information disclosed in this news release.
About Copper Fox
Copper Fox is a Canadian-based resource development company listed on the TSX Venture Exchange (TSX-V:CUU) with a corporate office in Calgary and an operations office in Vancouver and is involved in the exploration and development of the Schaft Creek copper-gold-molybdenum-silver deposit located in northwest British Columbia, Canada.
The Company is working on completing a feasibility study on the Schaft Creek mineral deposit, one of the largest undeveloped copper, gold, molybdenum and silver deposits in North America. The feasibility study is being led by Tetra Tech Wardrop on a minimum 120,000 tpd open pit mine and is expected to be completed mid-late summer, 2012.
Copper Fox holds title and a 100% working interest in the Schaft Creek project consisting of 52,843.34 hectares (130,579 acres). Included in this total are the "Schedule A" mineral tenures originally conveyed to Copper Fox pursuant to the option agreement dated January 1, 2002 between Teck Resources Limited ("Teck") and Copper Fox (the "Teck Option Agreement"), which consist of 8,334.34 hectares (20,594 acres). The "Schedule A" mineral tenures are subject to a 3.5% Net Profits Interest held by Royal Gold, Inc., a 30% carried Net Proceeds Interest held by Liard Copper Mines Limited ("Liard") and, together with the additional mineral tenures obtained by Copper Fox within the "Area of Interest" provided for in the Teck Option Agreement, an earn back option held by Teck. On completion of the feasibility study, Copper Fox will earn Teck's 78% interest in Liard. Teck's earn back option to acquire either, 20%, 40% or 75%, of Copper Fox's interest in the Schaft Creek property is triggered upon delivery of a positive feasibility study to Teck. Should Teck elect to exercise its option for 75%, Teck is required to fund subsequent property expenditures up to a total of 400% of those incurred by Copper Fox ($76.6 million to April 30, 2012) and arrange for project financing, including the Copper Fox portion. For full details of the Teck earn back option please refer to the Company's website www.copperfoxmetals.com.
The remainder of Copper Fox's registered interests in mineral tenures in British Columbia total 44,509 hectares (109,984 acres). These interests have been acquired by Copper Fox through mineral tenure acquisitions and mineral tenure purchase agreements subsequent to Copper Fox entering into the Teck Option Agreement. Certain portions of these registered mineral tenures are subject to inclusion within the Schaft Creek project pursuant to the terms of the "Area of Interest" provisions of the Teck Option Agreement.
On behalf of the Board of Directors
Elmer B. Stewart
President and Chief Executive Officer
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of the Canadian securities laws. Forward-looking information is generally identifiable by use of the words "believes," "may," "plans," "will," "anticipates," "intends," "budgets", "could", "estimates", "expects", "forecasts", "projects" and similar expressions, and the negative of such expressions. Forward-looking information in this news release include statements about: historical resource estimates and results of metallurgical test work on the Van Dyke property and exploration drilling results on the Sombrero Butte property, the completion of the feasibility study for the Schaft Creek project; estimated timing and amounts of future expenditures and "earn-back" options; geological interpretations and potential mineral recovery processes. There can be no assurance that the purchase of the Van Dyke and Sombrero Butte properties will be completed. Information concerning mineral reserve and resource estimates also may be deemed to be forward-looking information in that it reflects a prediction of the mineralization that would be encountered if a mineral deposit were developed and mined.
In connection with the forward-looking information contained in this news release, Copper Fox has made numerous assumptions, regarding, among other things: that the closing of the purchase will occur, that the geological, metallurgical, engineering, financial and economic advice that Copper Fox has received is reliable, and is based upon practices and methodologies which are consistent with industry standards; and the continued financing of the Feasibility Study; and the anticipated analytical results of the current drilling program. While Copper Fox considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause Copper Fox's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. Known risk factors include, among others: the number of closing conditions that the purchase of the Van Dyke and Sombrero Butte properties are subject to, including, but not limited to, the satisfactory due diligence of Copper Fox and the approval of the TSX Venture Exchange; that investigation and verification may show that the historical estimate on the Van Dyke property may not be accurate or exist at all; that the metallurgical testwork completed on leaching the copper mineralization reported to occur within the Van Dyke deposit may not be accurate; that the exploration drilling results from the Sombrero Butte property may not be related to an underlying porphyry system; that the feasibility study on the Schaft Creek project may not be completed within the contemplated time frame, or at all; the possibility that future drilling on the Schaft Creek project may not occur on a timely basis, or at all; fluctuations in copper and other commodity prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, and estimated economic return; the need to obtain additional financing to develop properties and uncertainty as to the availability and terms of future financing; the possibility of delay in exploration or development programs or in construction projects and uncertainty of meeting anticipated program milestones; uncertainty as to timely availability of permits and other governmental approvals
A more complete discussion of the risks and uncertainties facing Copper Fox is disclosed in Copper Fox's continuous disclosure filings with Canadian securities regulatory authorities at www.sedar.com. All forward-looking information herein is qualified in its entirety by this cautionary statement, and Copper Fox disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.
For further information:
Investor line 1-866-913-1910 or J. Michael Smith, EVP, at 1-604-689-5080